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APRIL 23, 2007 VOL. 21. NO 2

Ibrahim: A Man and His Controversial Moves

**Jimoh Ibrahim**

Jimoh Ibrahim’s grab-it-all approach to business leaves in its trail many controversies, including the image of a shadowy businessman with questionable intent
By Edward Dibiana and Tony Egbulefu
Many regard him as the new enfant terrible of the Nigerian corporate world. The popular saying that “those who fail to plan are planning to fail” makes little or no meaning to this young but controversial businessman who turned 40 only a few weeks back.
Jimoh Ibrahim, a lawyer and rising business tycoon from Ondo State, who is also chairman of several mega companies, aptly describes himself as a man who “operates by circumstances.” Planning, to him, is an “old theory of life” that may not necessarily give birth to success as he believes that “you may not plan, (yet) you may achieve so much in life”. That in a way, may be regarded as another definition of an opportunist.
Indeed, some of his critics in the business world see Ibrahim as a shark who is always ready to pounce on chunky business oppotunities, often in breach of some regulations. Last year alone, he was consistently in the news chiefly for his eye-popping acquisitions in insurance, aviation and the hospitality sectors. The acquisition of NICON Insurance and EAS Airline which he renamed “NICON ways” perhaps, stand out among several other business conquests of his.
Three weeks ago, Ibrahim returned to the front burner of business discourse in Nigeria with the controversial news of the sale of the 28 per cent share of African Petroleum Plc (AP) belonging to the Nigerian National Petroleum Corporation (NNPC) to him.
The NNPC had acquired the equity through its staff pensions fund in 2005 in a debt swap of over N10billion owed the corporation by AP. The acquisition was subsequently gazetted and slated for sale to the Nigerian public.
But rather than sell the shares to the public, Ibrahim to the consternation of AP shareholders discreetly moved to buy up the shares in total disregard of the regulatory authorities usual insistence that shares could only be sold on the floor of the Stock Exchange, and not in bulk to a particular shareholder.
The Source gathered that the deal enjoyed ‘smooth’ presidential approval as the Minister of Energy, Edmund Daukoru, was allegedly promoting the illicit deal before the protestation of other interest groups caused the presidency to pronounce its cancellation.
Had the deal succeeded, AP would have been faced with the problem of having two core investors who would be left with no option but to scavenge for shares from other smaller investors in a spirited quest to secure the controlling equity over the other.
The current core investor, Acema Management Company Limited, a company promoted by Afribank Plc came onboard in 2005 when it took over the 30 per cent equity formerly owned by Sadiq Petroleum Limited, which was forced out of the company in controversial circumstance that year.
To prepare grounds for the aborted take-over of the oil marketing firm, The Source was told that Ibrahim’s foot soldiers were planted on the floor of the stock exchange to mop up AP shares that were put up for sale since last year. It was also gathered that a N17.5 billion facility had been secured by Ibrahim from Union Bank to seal the deal.
But for what Ade Afolanyan, Corporate Affairs Manager of Ibrahim’s Nicon Insurance called "little misunderstanding between his boss and the presidency" in a telephone interview with The Source, the deal would have materialised.
Many factors apart from the “little misunderstanding” worked against Ibrahim’s dream of becoming the number one investor in AP. For instance, in an advertorial published in Thursday, March 29, in ThisDay, entitled, “Who is Backing this Illegality?” a group, Universal, Shareholders Association of Nigeria cried out to “the court of public opinion over the determined efforts of the brazen illegality and gross abuse of due process” with respect to the proposed sale of the NNPC interest in AP.
The statement signed by Alhaji Jose Sanusi, Chief Isidora Eke and Dr. John Lucas said that the deal was in “total disregard of the provision of the extra-ordinary Federal Republic of Nigeria Official Gazette No. 20 (of) 1st March, 2006 Vol 93, where it is clearly stated that such shares being sold ought to be given to the Bureau for Public Enterprises (BPE) to be sold to existing core investors and the Nigerian public on the floor of the Nigerian Stock Exchange. It is tantamount to lawlessness for the authorities to embark on the sale of these shares to a new core investor thereby creating parallel core investors in the company. This will diminish investors’ confidence in the country’s business environment and (is) a recipe for chaos.”
Aside the grouse of the shareholders, another factor that derailed Ibrahim’s AP deal was the seeming gang-up of other key players in the down-stream sector. The Source learnt that some of these key players who do not particularly enjoy cordial relationship with the controversial investor and are also close to the Abuja seat of power, fed President Olusegun Obasanjo with some of the information that Daukoru allegedly denied him concerning the deal.
For instance, these oil marketers told the President that Ibrahim does not have up to 10 per cent equity in AP before the aborted deal, contrary to what he was told by the Energy Minister . An infuriated Obasanjo was to confront Daukoru with this piece of information before asking him to cancel the deal.
These same set of people, it was alleged, denied Ibrahim membership of a new exclusive club, “Boat Club” which they are founding members. Ibrahim, who had already paid the membership fee was rudely shocked when his money was returned to him.
Some people are also of the view that his close relationship with retired Major General Muhammadu Buhari’s presidential campaign organisation may have also contributed to his failure to secure yet another lucrative business kill.
Sixteen years after graduation from the Obafemi Awolowo University, Ile-Ife, Ibrahim, fourth in a family of over 40 children and parented by a brick-layer father and fish-seller mother has miraculously emerged as a stupendously wealthy man and one of the biggest investors in the Nigerian economic firmament in contemporary time.
Niche business is not his bag, rather, Ibrahim had dug his fingers into dozens of pies that run through actuary business, hospitality, aviation, oil and gas, furniture, block-moulding and realty. In the oil and gas sector, Ibrahim’s Global Fleet, by his estimation, is worth about one billion dollars with about 250 petrol stations and no fewer than 150 trucks. In actuary, he owns NICON Insurance, once a national patrimony, which he bought from the Bureau of Public Entreprises (BPE) at the cost of N46 billion. Before snapping up NICON Insurance, he had grabbed Great Nigeria Insurance (GNI) and then having to cough out about $50 million to grab the chunkiest stake in embattled Nigerian Re-insurance (Nigerian-Re). He is also a principal investor in Globe Re and Continental Re.
In hospitality, Ibrahim acquired Maidan Hotel, Lekki, a four-star outfit at a stunning $15 million, and renamed it NICON Hotel. In Abuja, he made failed attempts to buy Le Meridien, another top hotel, at the cost of N5.3 billion and NICON Noga Hilton, but the range of his hotel acquisitions has been on expansion, with so many of such buy-ups coming under the NICON brand name.
Last year, he thought of charging into the aviation sector and in doing so incorporated Fleet Air. He put all other actions on the air transport business on the ice and laid in wait. His patience paid off when EAS Airlines buckled under financial strains and pronto, he materialised and bought it. It is a fleet of two aircraft which he renamed NICON Airways.
In real estate, Ibrahim says he is landlord to 40 branches of Nigerian banks, through a pattern of building and renting exclusively to banks. And because he needed to be at the commanding height of one of the consolidated banks, he targeted Afribank, but first he acquired a two billion naira equity investment in Trade Bank, which was tying up with Afribank in the consolidation period. Trade Bank would have emerged the principal partner in the tie-up that fathered the new Afribank if the deal had worked according to plan. But some other interested parties who saw through Ibrahim’s gambit thwarted the move and he withdrew his investment from Trade Bank. Expectedly, Ibrahim felt no pains over the failed move, instead, he praised those who squelched the move as more being intelligent.
Ibrahim also owns VGC Paving Stones, which he bought from its former owner for N400 million. But he has not been that lucky with his attempts to have a bite at the juicy apple, which the Nigerian telecom sector currently presents. For example, he lost out in a bid to acquire VGC Communications, for the major reason that he was burning candles at both ends as at the time of the bid. Then, Ibrahim was battling at NICON Insurance auction, as well as that of VGC Communications slated for $80 million, at the same breath. He got NICON and lost VGC Communications, but has not stopped ruling the loss of the communication company. “I was to pay $60 million and I won’t pay anything until two years. Of course, I would be making income of about two million dollars. Obviously in about five years, you are out of the deal and you will own it,” he rued in an interview with The News magazine.
Ibrahim also bided for NITEL and failed. The NITEL bid, he said, was big, “and we needed to have very big money.”
Of all his acquisitions, however, that of NICON Insurance has remained a hot potato in his hands. It has indeed, pushed the public to look at Ibrahim with deeper askance. Beyond the shock that one individual with a shadowy background could muster the financial muscle of a whopping N46 billion for the octopus insurance company, Ibrahim was intent on running the affairs of NICON as Managing Director, not minding the fact that he hardly knows his left from his right in insurance. A scadalised National Insurance Commission (NAICOM), the insurance industry’s supervisory body stood its ground against Ibrahim’s rude intrusion. To run rings around NAICOM, Ibrahim artfully floated the NICON Group and become its chairman and chief executive officer. Within the group, NICON Insurance became only a subsidiary and Ibrahim directly superintends its management as chairman/CEO of the group. Incongrous as influence in NICON Insurance is with rules stipulated by NAICOM, the supervisory body appears to be hamstrung in wielding the big stick in that Ibrahim could not be seen as having bent or broken an insurance law. But those who feel the pangs of Ibrahim’s take-over of NICON Insurance are dozens of the company’s staff, many of whom he weeded with abandon. Talking about the NICON Insurance controversies, Ibrahim says “it is normal that people will make all sorts of noise when they see you doing things like that. The criticisms are our strength, because we are not for one day rattled.”
Evidently, Ibrahim makes no pretensions about the hubris with which he goes about his money-grabbing. Infact, he describes himself as so rich that he can buy up Ekiti, if the state is put up for sale. “If Ekiti is to be sold today, I will draw the cheque,” he told Tell magazine early last year. He had more shockers that speak loudly of his personage: “At a time I wanted to buy AP (African Petroleum), and I was close to the Vice President, they said it was he that was sponsoring me. When AP did not click, I left. When I was contesting for governorship of Ondo State, they said it was Buhari. Now, they don’t see me again with Buhari and they changed the focus of the news...I was an active supporter of Buhari. Buhari was sleeping in my bedroom in Igbotako during the campaigns. I brought him to campaign against Obasanjo on our land. I did not expect Obasanjo to sign any bid, where I am a successful bidder. But he signed our bid for NICON. When I bid for NICON, I bid N46 billion for the place. The next person to us bid N19 billion.
“The president saw who won. The reserved price was N40billion and we bid N46billion. Suddenly they told me that I cannot be a managing director of an insurance company. It’s the board of the corporation that appoints its CEO. But if that’s the case, I said I am even too big to sit down as MD of NICON," the burgeoning business tycoon said. But what explains Ibrahim’s arcane rise from an anonymous personality to a financial colossus? He says he began making money soon after he left the university in 1990 and enrolled in the Nigerian Law School, through organising seminars on local government laws. According to him, the opening for the seminars came as a result of the autonomy granted that tier of government by the General Ibrahim Babangida regime. Ibrahim said he ran 17 of such conferences in the Nigerian Institute of International Affairs (NIIA), Lagos and was netting an average of three million naira per seminar. As a youth corps member, Ibrahim said he put up four buildings in Egbe, Lagos suburb, at an estimated cost of N60million. From local government seminars, Ibrahim said he advanced to that for permanent secretaries at state level. One of this seminars alone, Ibrahim claimed, fetched him N34million. Ibrahim said he moved on with seminars on Public Service Rules, for all the directors in the public service. “That way, we had all directors from state ministries. In a single ministry, there are no less than five or six directors. Multiply this by about 30 parastatals. It is a lot of money. All of all these were money-making ventures. So we had all these, we were making money,” he explained in a press interview. From here, he said he went into seminars on withholding tax, and his clients, he said, were the oil companies. He was later to consult for the Federal Government on tax collection, through Alhaji Abu Gidado, then Minister of State for Finance. In doing this, he said he made a killing, income-wise.
Ibrahim’s wealth, he said, became exponential when he relocated from Egbe to Victoria Garden City, after buying a property for N21million in the highbrow estate and the subsequent acquisition of a landed property on which he built a filling station and two banking halls. Fidelity Bank, according to him took the upper floor for five years at the sum of N27million, while Oceanic Bank took the ground floor for N31million. Ibrahim said he gave the fuel station to Total, where he was dealer and was earning two naira per every litre of petrol sold. The station, he said, was then selling two million litres per month, giving him a net income of four million naira every month. From here, he said he began to replicate the concept of a filling station and banking halls all through Lagos, such that today, he has about 250 petrol stations of his own under the brand name, Global Fleet and is landlord to about 40 branches of Nigerian banks.
Though told over and again, Ibrahim’s account of his journey to wealth and fame seem to convince only a few. There is little doubt that Ibrahim had good business, doing seminars, but he never hit it big until President Obasanjo took charge. Though he denies ever meeting the president before his success at the NICON Insurance bidding, many believe that this is less than the truth and that as a matter of fact, the secret of Ibrahim’s dramatic economic prosperity lies with the president. Certain developments have made this line of thought compelling. On another score, information at the disposal of The Source also cast huge question marks on the integrity which Ibrahim crows about. The Source can confirm, for instance, that police authorities which finally yielded to pressures to check up on certain particulars, upon which Ibrahim staked his independence in NICON’s bidding and acquisition, were to discover, there are yawning discrepancies that no longer makes Ibrahim’s claim to business integrity, add up. In fact, bare-faced forgeries were said to have been uncovered in some of his papers. And to ensure that he faces justice, Assurance Acquisation Limited, (AAL) a few months ago dragged Ibrahim to court over these alleged breaches of best practices”.
And rather than seminars, contracts for disposing properties confiscated by courts on behalf of the judiciary, some other factors appear to have provided Ibrahim with his first economic ladder in life. And though bestriding the Nigerian insurance industry, insiders told The Source that Ibrahim is merely a pretender to the throne. The crowned head, they say, belongs to Obasanjo. It instructs, for instance, that the president uses Professor E.C. Edozien, almost twice as much as he uses Ibrahim as a front yet the professor goes about it tongue-tied. Edozien at the moment is the chairman of PZ, Obasanjo’s Bells University and Nigerian RE. In addition to Ibrahim and Edozien, was the late Ibrahim Waziri, director-general of Nigerian Railway Corporation. The troika, The Source was told, represented the President’s pawns in the Nigerian investment chessboard. On standby, allegedly, is Saminu Turaki, Jigawa State governor. To grab Nigerian Re, Edozien, Waziri Ibrahim, Ebitimi Banigo and Turaki had banded together and formed a Reinsurance Acquisition Group (RAG) which controls 51 per cent equity shares of the reinsurance company. Ibrahim holds forte in NICON Insurance, Great Nigerian Insurance Company and the merged Globe Re and Continental Re, through equity investments on behalf of NICON Insurance.
In what looks like intersecting circles, RAG, which owns Nigerian Re, also dug its hands into the merged Globe Re and Continental Re, at a time when Ibrahim was being prodded by Edozien to pump in $50million for a 51 per cent equity holding in Nigerian Re. Edozien as the chairman of Nigerian Re wanted an Ibrahim/NICON take-over of Nigerian Re in order to sustain the monopoly of the Nigerian insurance indsutry by the president’s men. This drew grumblings from Joe Ameh, MD, Nigerian Re, who had successfully shopped for GIC, an Indian company as a foreign core-investor in the company. But Ameh could hardly grumble aloud as he mounted the saddle only as a result of the schemes of Professor Edozien and the coterie of the president’s favourite businessmen. With Ibrahim’s successful acquisition of Nigerian Re, his march to the top of Nigeria’s economic ladder appears unhindered. But, for how long?